How is Erie Community College’s financial health?

This blog has chronicled in many posts the financial issues involved in the management of Erie Community College (aka SUNY Erie). With an annual budget of more than $105 million and a heavy investment of public funds in the institution, it’s an important question.

Like most other colleges in Western New York, ECC has struggled with declining enrollments. Reasons include a smaller pipeline of students in the area and a healthy economy. There’s not much that can be done with the area’s demographics. And a healthy local economy should be cheered, even though historically enrollment drops when people have jobs and are less in need of boosting their educational credentials.

ECC management says that it has worked to balance reduced revenues with cuts in spending. They committed themselves to only using their previously diminished fund balance for payments on the long-running installation and use of its new Enterprise Resources Planning (ERP) system, which is not complete. They have looked at ways to increase enrollment with some niche marketing, and to beef up their efforts to retain students once they enroll. Pretty much all colleges in the area are struggling with similar issues.

In light of those matters it is important for ECC, as a public institution, to track and openly discuss where they stand. All stakeholders – the students, the faculty and staff, the administration, the sponsoring county government, and the taxpaying public – need to know what is going on. When finances are tight, priorities need to be set and decisions among possible courses of action need to be made. With a multitude of stakeholders whose priorities may be different, information must be generally available before decisions are made.

The College’s website publishes the agenda and minutes of the meetings of their Board of Trustees. They are pretty detailed.

Financial information, of course, needs lots of numbers – enrollment, revenues, expenses, debt, use of fund balance, personnel, salaries and so forth. One of the ways that the Board has provided some of that information is through an item included in their agenda under the heading of “Financial Health.” The item is a “Financial Dashboard.”

The Dashboard has included very basic but very relevant information, such as the school’s revenues, broken down by sources, and its expenses, organized by categories such as salaries, building operations and so forth.

The Board’s March 2019 agenda package included a Financial Dashboard reporting on finances through February 2019, which represented the first half of the current fiscal year that ends on August 31. The February numbers reported that:

  • Total revenues for the first six months were below where the revenues stood for the same period in the previous fiscal year (down $4,368,529 or 6.9 percent).
  • Tuition revenues, the biggest source of income, were down $2,899,411 (6.9 percent) in the same period.
  • Student fees were down $992,275 (10.4 percent).
  • Total expenses were up $2,929,343 or 6 percent compared with last year.
  • Salaries and wages were up $1,685,693 (6.2 percent).
  • Supplies and services were up $902,938 (12.1 percent).

These numbers were consistent with the numbers reported for earlier months in the year.

It would seem, therefore, that current information about the school’s finances would be important for the College’s decision-makers and others to know considering that revenues are headed down and expenses are headed up. Which makes it hard to understand why the Financial Dashboard has disappeared from the two most recent Board agenda packages, for April and June of 2019. How are things going now?

The College’s 2019-2020 budget reports that enrollment in the next academic year will be lower, but by how much is not very clear and the school’s projections in any case tend toward the optimistic side.

Current numbers on things like tuition revenues would be informative. It would be helpful to know if the school will fulfill its pledge on the non-use of fund balance except for the new ERP system. And by the way, how is the system implementation going?

Are there any developing issues that will have a negative impact on the budget? State aid is a big revenue source. Are there any issues on what has been received from the state? Does state aid match with enrollment?

Perhaps the absence of the Financial Dashboard from the Board’s agenda is telling us something. Is the Board really not interested in the school’s finances? Or is it that the finances are trending negatively and the school’s administration is hiding them from public view to avoid embarrassment?

An institution as large and important as Erie Community College does neither itself nor the community it serves much good by keeping important information out of view. If the school is heading toward hard times financially then it needs to share information and decision making with all of its stakeholders so that collectively all concerned can figure things out. When it comes to a public institution’s finances, when warning signs are going up, the day of reckoning is near.

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